Financial Aid Policy: Lessons from Research

Abstract

The student aid system has dramatically increased in size and complexity over the past few decades. To understand the effectiveness of student aid, one needs to consider the wide array of grants, loans, and tax benefits administered by multiple agencies and levels of government. In this article, the authors describe the evolution of student aid programs, focusing on the largest programs and providing a broad overview of the rest. They then discuss whether these programs increase college enrollment, persistence, and completion.

The authors consider the methodological challenges facing researchers in this arena and offer some lessons about student policy aid based on the existing research. The article concludes with a discussion of issues that may be explored in future research, including the importance of program design and delivery, whether there are unanticipated interactions between programs, and to what extent program effects vary across different types of students.